In this paper empirical evidence is presented on the elasticity of private R and D spending on its price. A censored panel-data regression model with random effects is applied to a balanced panel of 726 Italian firms over the 1992-1997 period. Implied estimates point out that Italian firms' response to policy measures (including tax credits), aimed at reducing the user cost of R and D capital, is likely to be substantial (1.50-1.77). Furthermore, we also find that the elasticity of R and D spending is higher in recession (2.01) than in expansion (0.87).
Is Private R&D Spending Sensitive to Its Price? Empirical Evidence on Panel Data for Italy
PARISI, Maria Laura;
2003-01-01
Abstract
In this paper empirical evidence is presented on the elasticity of private R and D spending on its price. A censored panel-data regression model with random effects is applied to a balanced panel of 726 Italian firms over the 1992-1997 period. Implied estimates point out that Italian firms' response to policy measures (including tax credits), aimed at reducing the user cost of R and D capital, is likely to be substantial (1.50-1.77). Furthermore, we also find that the elasticity of R and D spending is higher in recession (2.01) than in expansion (0.87).File in questo prodotto:
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